Legislation CrossfireLegislation CrossfireSetting the StageSetting the Stage

David K. OwensAABE Chair

Legislative Issues and Public Policy Committee

2010 Annual AABE ConferenceMay 20, 2010

America’s ChallengesAmerica’s Challenges

Stimulate economy and get America back to work Health Care (Legislation passed) Financial Reform

Immigration

Address climate change

Transform our society to be greener and more efficient

Increases in Energy Prices Hit Low- andIncreases in Energy Prices Hit Low- andFixed-Income Households the HardestFixed-Income Households the Hardest

Income spent on energy for households earning >$50,000 / year - 7% of income $10,000 - $30,000 / year – 20% of

income (25% of households) <$10,000 / year - 46% of

income (8% of households)

Households earning < $30,000 Mostly senior citizens, single

parents, and minorities Force hard decisions about what

bills to pay … housing, food, education, health care, and other necessities

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Household Energy Expendituresvs. After-Tax Household Income

Over $50,000 $10,000 - $30,000 Under $10,000

One-third of Americans

shoulder major energy burden

Sources: Redefining Progress; U.S. Census Bureau, Current Population Survey, 2006 Annual Social and Economic Supplement

Climate Change QuestionsClimate Change Questions We Must Answer!We Must Answer!

How do you minimize the impact of compliance costs on consumers?

What must U.S. climate change legislation and carbon management strategy include to

Ensure economic growth?

Ensure energy security?

Avoid unfairness?

Protecting CustomersProtecting Customers Targets & timetables

Must be harmonized with the availability of technologies

Timing of transition to full auction Allocation of allowances can help address cost of compliance

Other ways to mitigate cost impacts on consumers Price collar / safety valve Offsets Strategic allowance reserve

Combined efficiency and renewable energy standard

*Includes generation by agricultural waste, landfill gas recovery, municipal solid waste, wood, geothermal, non-wood waste, wind, and solar.

** Includes generation by tires, batteries, chemicals, hydrogen, pitch, purchased steam, sulfur, and miscellaneous technologies.

Sum of components may not add to 100% due to independent rounding.

Source: U.S. Department of Energy, Energy Information Administration, Power Plant Operations Report (EIA-923); 2008 preliminary generation data.

January 2010

© 2010 by the Edison Electric Institute. All rights reserved.

Different Regions of the Country Different Fuel Mixes to Generate Electricity

African American Communities:African American Communities:

Have high unemployment ratesHave the lower median family incomeAre in regions heavily dependent on power generated by

coalHave the least access to Renewable Energy May be Required to Purchase Renewable Energy From

Other Regions of the CountryWill be significantly impacted by Climate Change efforts

What Will It Take to Address Climate What Will It Take to Address Climate Change?Change?

Renewables

Energy efficiency

Clean coal technologies

Carbon capture and storage

Nuclear

Plug-in hybrid electric vehicles (Smart grid)

We need it all … but it will be costly!

There is no silver bullet!

Energy Efficiency Can Lower BillsEnergy Efficiency Can Lower BillsHelp Address Climate ChangeHelp Address Climate Change

Average US household owns 24 consumer electronic products

2 DVRs use as much energy in 1 year as a refrigerator Play Station and X-Box use more electricity than a PC PCs and TVs now account for 10% of a home’s electricity usage 99% of these products must be plugged in or recharged 42” Plasma TV uses more than twice as much as a standard 27” TV

More efficient use of energy could significantly reduce energy bills

Need to educate all consumers about how to save energy and use it more efficiently

American Reinvestment and American Reinvestment and Recovery Act (ARRA)Recovery Act (ARRA)

Total: $78 Billion

Beyond Green Jobs: Beyond Green Jobs: America’s Future Energy JobsAmerica’s Future Energy Jobs

Source:

Opportunities - Opportunities - Green JobsGreen Jobs

Energy Independence and Security Act of 2007 $125 million / year to create a worker training program, special focus

on opportunities for low income people

American Reinvestment and Recovery Act (Stimulus Bill) Significant funding for a broad range of programs – including energy

efficiency, renewables, climate change, smart grid Workforce training

Home Star Energy Retrofit Act of 2010 Authorize $6 billion over 20 years for a national energy retrofit

program for American homeowners

Opportunities - Opportunities - Green JobsGreen Jobs

Renewables - Roof-top solar heating, water, energy Meeting the increasing state, federal and consumer requirements

Energy Efficiency Energy audits, retrofits, new technologies, green building standards Efficiency management – data mining

Smart meters / smart grid Replacing legacy systems with new technologies

Demand response Provide consumers and utilities with new tools to manage demand

Plug-in Hybrid Electric Vehicles

Need programs to develop and attract new talent

What Do We Need To Do?What Do We Need To Do?

Cost mitigation Mitigate the costs on low-and fixed-income consumers associated

with the new energy and climate economy Jobs and Small Business

Create jobs and business opportunities for minority communities, and for minorities in general; and

Energy Literacy Facilitate improvements in energy literacy through education,

training, and outreach